Hampton Rods Business 2018

2018

The ultimate guide for doing business in the region

Vol. 1

The ultimate guide for doing business in the region

MORE THAN A MAIN STREET

8

Business Districts

1

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On the cover Photo courtesy of Port of Virginia

CONTENTS

6

26

Overview of Hampton Roads

Industry & Business Research The fastest-growing private companies in the region.

Demographics on the second-most-populated region in the state.

30 Military

8 Executive Insights Local business leaders weigh in on relevant topics.

10 Arts, Recreation & Tourism

18 Education & Workforce Local education resources and statistics.

The economic impact of arts districts and more.

22

15

Largest credit unions and banks.

Construction & Real Estate Major construction projects and commercial real estate firms.

36

Finance

24

A breakdown of the population at local military bases.

31 Ports & Shipping Dredging project receives federal approval, state financial support.

Organizations working to solve some of the world's toughest problems.

38 Residential Real Estate Interview with Long & Foster's Katie Zarpas.

42 Technology Subsea cables open new sector for Virginia Beach.

43 Transportation Major road projects and regional transportation statistics.

Health Care Hospitals by net patient revenue.

HAMPTON ROADS BUSINESS - 2018

3

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Introduction

Contributors Amtrak Commercial real estate firms Federal Deposit Insurance Corp.

Hampton Roads Economic Development Alliance

Norfolk Southern Corp.

Port of Virginia Real Estate Information Network Inc. Research and development facilities

Hampton Roads Transit

U.S. Census Bureau

Meeting and convention facilities

Virginia Department of Education

Military bases

Virginia Department of Transportation

National Credit Union Administration Newport News/ Williamsburg International Airport Nonprofit and community colleges Norfolk International Airport

Virginia Economic Development Partnership Virginia Health Information Workforce development organizations

A new look at the region

W

elcome to the first edition of Hampton Roads Business! This in-depth guide examines the people, places and companies shaping the region. It’s also meant to help local firms and newcomers conduct business in the area. In this publication you’ll find vital statistics, formerly included in the Hampton Roads Statistical Digest, as well as enhanced features analyzing the most important aspects of the economy.

We kick things off with demographics on the second-mostpopulated region in the commonwealth. You’ll also find insight from local heavy hitters, including Port of Virginia CEO John F. Reinhart and Old Dominion University Economist Vinod Agarwal. We also spoke to the players involved in shaping the area’s colorful arts districts and discussed the districts’ impact on business and tourism. Additionally, we examine the economic implications of subsea cables that are being installed in Virginia Beach and will reach as far as Brazil and South Africa. This is only some of the expanded coverage you’ll find in the inaugural Hampton Roads Business. Is there something you would like to see next year? I’d love to hear your suggestions. Email me at vgarabelli@virginiabusiness.com.

— Veronica Garabelli, Special Projects Editor

President & Publisher ........................Bernard A. Niemeier Editor .................................................. Robert C. Powell III Managing Editor .....................................Jessica Sabbath Special Projects Editor ........................Veronica Garabelli Assistant Editor..................................... Michael O'Connor Intern ...............................................................Daniel Berti Art Director ........................................ Adrienne R. Watson Production Manager ..................................... Kevin L. Dick Circulation Manager ................................ Karen Chenault Marketing Services Manager ...................... Lisa Niemeier CENTRAL VIRGINIA 1207 East Main Street, Suite 100, Richmond, VA 23219 (804) 225-9262 Fax: (804) 225-0028 Vice President of Advertising .................. Hunter Bendall Account Manager ...................................Lindsey Swain HAMPTON ROADS 4211 Monarch Way, Suite 104, Norfolk, VA 23508 (757) 625-4233 Fax: (757) 627-1709 Sales Manager .................................................. Sara Gray ROANOKE 210 S. Jefferson St., Roanoke, VA 24011-1702 (540) 597-2499 Sales Manager ............................................Lynn Williams NATIONAL SALES (973) 464-9969 Sales Manager ........................................ Molly Thompson An annual publication of

VirginiaBusiness.com

HAMPTON ROADS BUSINESS - 2018

5

An overview of

HAMPTON ROADS With a population of more than 1.7 million, Hampton Roads is the second most populated region in the state. The region also is home to the largest city in the state, Virginia Beach, which has more than 450,000 residents.

Hampton Roads boasts the third-biggest port on the East Coast, one of the largest concentrations of military personnel in the U.S., a thriving tourism industry and a growing entrepreneurial ecosystem.

$

Math

ews

Gloucester James City

Median household income1

Williamsburg Yor k

port s

New

%

Poquoson

New

Surry

Hampton

Unemployment rate2

Isle of Wight

City of Franklin

Norfolk

Portsmouth tsm th Chesapeake

Suffolk

Southampton

Virginia Beach

Civilian labor force2

% Source: Hampton Roads Economic Development Alliance

Labor force participation rate1

1. U.S. Census Bureau, 2017 estimate of the resident population 2. U.S. Bureau of Labor Statistics, 2017 annual average, seasonally adjusted 3. Esri Business Analyst Online

1

Average commute time

6

HAMPTON ROADS BUSINESS - 2018

Note: Population figure includes Hampton Roads MSA, including Currituck and Gates counties in North Carolina.

Population

1

Population

% 3

Population 18-34

%

%

Male vs. female ratio1

Locality

20171

Population density2

Chesapeake

240,397

652

Franklin

8,176

1,046

Gloucester

37,292

169

Hampton

134,669

2,673

Isle of Wight

36,552

112

James City

75,524

470

Mathews

8,779

105

Newport News

179,388

2,630

Norfolk

244,703

4,486

Poquoson

12,053

793

Portsmouth

94,572

2,839

Southampton

17,750

31

Suffolk

90,237

211

Surry

6,540

25

Virginia Beach

450,435

1,759

Williamsburg

15,031

1,559

York

67,739

625

Virginia

8,470,020

203

United States

325,719,178

1 Estimates as of July 1, 2017

0.10% 3.72%

2 Based on 2010 Census

1.42% 3.86%

0.31%

87 Source: U.S. Census Bureau

Racial diversity White Black/African-American American Indian/Alaska native Asian

Median age1

Native Hawaiian/Pacific Islander

30.69%

Some other race

59.90%

% Population with a bachelor’s degree or higher1

Two or more races Source: U.S. Census Bureau, 2012-2016 American Community Survey, five-year estimates for Hampton Roads MSA, including Currituck and Gates counties in North Carolina.

Comments, Questions, Suggestions?

Contact Veronica Garabelli at vgarabelli@virginiabusiness.com.

To order additional copies, contact Karen Chenault at kchenault@virginiabusiness.com.

HAMPTON ROADS BUSINESS - 2018

7

Executive Insights We asked six local leaders for their take on the current and future state of Hampton Roads.

Here’s what they had to say.

Vinod Agarwal

Gilbert Bland

professor of economics and deputy director, Dragas Center for Economic Analysis and Policy, Old Dominion University, Norfolk

president and CEO, Urban League of Hampton Roads

Question: What do you see as the biggest issue facing the region?

Question: Do you foresee a recession in the near future? How would that impact Hampton Roads?

AAnswer: nswer

My former experiences as a commercial banker, president of a national association representing entrepreneurs and chair of the State Council of Higher Education for Virginia, in addition to my current service as CEO of the local Urban League, shapes my perspectives to identifying the greatest challenges facing our region. A key opportunity is to fully prepare and engage the local African-American population, which represents 33 percent of the Hampton Roads population (over 500,000 residents, and the 13th largest African-American population in America).

AAnswer: We do not expect a recession in 2018 or 2019. Primary reasons for this are the expansionary fiscal policy implemented through the Bipartisan Budget Act of 2018 and the Tax Cuts and Jobs Act of 2017. However, we also are increasingly troubled by the prospects of a global trade war. The imposition of tariffs by the U.S. and counter-tariffs by its trading partners would adversely impact the growth of the national economy.

If we have a recession, Hampton Roads' economy will face a much smaller adverse impact compared to the last recession. The primary reason for this is increased national defense spending during fiscal years 2018 and 2019. Historically, about 4 percent of national defense spending occurs in Hampton Roads. We anticipate that defense spending here will increase by $3 billion this fiscal year and $4 billion in fiscal year 2019, and its effects will last through at least 2020.

Chad Matheson director, business intelligence, Hampton Roads Economic Development Alliance

Question: What major economic development project in the area are you most excited about? Why?

8

HAMPTON ROADS BUSINESS - 2018

It's imperative to develop effective educational pathways from pre-K to post-secondary. A great education is a gateway to personal success and economic participation.

Regarding growing economic impact, it’s necessary to have an intentional focus on career and leadership advancement for employees; governance opportunities for business leaders; public and private procurement opportunities and targeted programs to allow access to capital for small business.

Answer: Virginia Beach and Hampton Roads are positioning themselves as a leader in the subsea cable ecosystem.

Submarine fiber-optic cables encourage opportunities for industry growth and represent a highly valuable long-term infrastructure and business development opportunity for Hampton Roads. To capture these opportunities, Virginia Beach continues to build density by adding the necessary infrastructure to position the region as a competitive and global connectivity hub.

In the short-term, benefits will arrive in the most tangible forms – new employment and capital investment. Complementary to these tangibles, investment activity encourages positive market sentiment on the global scale, increased visibility and brand recognition for the region, and an improvement to the overall attractiveness and regional value proposition within the information technology sectors. Over the long-term, employment and establishment growth in related industries could position the region favorably by strengthening the diverse range of high-tech, higher-wage industries within Hampton Roads.

Photos By Mark Rhodes

John F. Reinhart CEO, executive director, The Port of Virginia

Question: How does Hampton Roads’ economy drive the economy in the rest of the state?

AAnswer: The Hampton Roads region is home to several important economic engines and one of those is The Port of Virginia, which is Virginia’s – and the Mid-Atlantic’s – maritime global gateway to the world. The cargo flowing across the port has a long-lasting, positive and statewide impact on Virginia’s economy. On an annual basis, the port supports more than 530,000 resident jobs, direct and indirect, throughout the commonwealth and is responsible for generating more than $88 billion in total economic impact.

The port’s positive effect on Virginia’s economy will increase as progress continues on the $700 million expansion of its two primary container terminals and a project to deepen the Norfolk Harbor and commercial shipping channels to 55 feet. These initiatives will allow the port to handle even bigger ships and more cargo for decades to come and result in continued job creation and economic investment across the commonwealth.

Bryan Stephens president and CEO, Hampton Roads Chamber

Question: What do you want people in other parts of Virginia to know about Hampton Roads?

James K. Spore president and CEO, Reinvent Hampton Roads

Question: What business sector is growing the most in the region? What do you attribute to that growth?

Answer: The Hampton Roads region continues to see solid growth in the business and professional services sector as well as in the health-care industry. Recent increases in the construction sector have been stimulated by congressional approval of the federal budget with its associated increases in military base construction expenditures. The adoption of the defense budget has also driven strong increases in the shipbuilding and repair sector. Significant momentum also is being generated in the entrepreneurial business startup arena with the founding of 757 Accelerate, [a business acceleration program] and its associated 757 SEED Fund. Another bright spot regionally is the recent announcement by Google of another very high capacity trans-oceanic subsea cable connecting the region to France. This, coupled with the MAREA and BRUSA [subsea cables] is driving data center and related IT/cyber growth opportunities in Southeast Virginia.

Answer: Hampton Roads has it all!

We are a proud region, strong in our military presence with all branches of the service represented and home to the world’s largest naval station. We get to live where other people vacation.

Our beautiful oceanfront and vibrant boardwalk, the Chesapeake Bay and other natural waterways, wildlife refuge, national parks, and temperate seasons are an outdoor enthusiast's dream. Our diversity can be seen through our industries and people. The Port of Virginia serves as a global shipping hub and a pillar of our economy. Our world-class educational institutions include two Historically Black Colleges (HBCUs) as well as a STEM-focused primary education as NASA and Jefferson Labs lead the way in research. We are at the heart of the Historic Triangle but also home to modern technology, entrepreneurs and innovators. Hampton Roads is the perfect combination of history with a modern vision and a region where people want to live, work, play and raise their families.

HAMPTON ROADS BUSINESS - 2018

9

ARTS, RECREATION & TOURISM

Commune Restaurant provides a view of a mural in Norfolk's NEON district.

Tapping creative assets Local arts districts aim to stimulate culture, economy

by Daniel Berti olorful murals, coffee shops and green spaces can be seen dotting some urban landscapes of Hampton Roads once marked by vacant storefronts and deteriorating infrastructure. Many of these areas have officially been designated cultural arts districts by local governments with the purpose of stimulating business and generating new sources of revenue and tourism.

In the last decade, arts districts have popped up in Norfolk, Virginia Beach, Williamsburg, Portsmouth and Hampton. In many cases, the

C 10

districts offer financial incentives to attract businesses or have been rezoned to spur commerce.

Businesses locating in rehabilitated structures within Virginia Beach’s ViBe Creative District, for example, are eligible to receive partial property tax exemptions.

The district has seen an influx of 25 new businesses since its 2015 rezoning, says Executive Director Kate Pittman.

According to Washington D.C.based nonprofit Americans for the Arts, businesses involved in the creation or distribution of the arts

HAMPTON ROADS BUSINESS - 2018

employed 3.48 million people in the United States as of April 2017, or more than 2 percent of U.S. employees. In Virginia Beach, the arts generated $87.7 million in total expenditures in 2015, supporting 2,875 jobs.

The changes have been gradual, but organizers at both the grassroots and governmental level say that the process of creating a vibrant arts district is well worth the wait. “It’s been an effort to beautify, but with purpose,” says Pittman. The following pages offer a glimpse of the region’s arts districts.

Photos by Mark Rhodes

Norfolk Norfolk’s NEON district was born in 2013. It is filled with public art projects, restaurants and galleries. The district includes major cultural institutions like the Chrysler Museum of Art and Harrison Opera House as well as projects that showcase local talent and entrepreneurship. That includes the d'Art Center, a nonprofit community art center, which relocated to NEON in 2016.

The NEON district is a collaboration by the Downtown Norfolk Council, grassroots volunteers and the City of Norfolk. Rachel McCall, special projects manager at Downtown Norfolk Council, says that these entities have come together in a unique and positive way. “It takes a lot of community effort,” she says.

Since its creation, the NEON district has continued to update infrastructure, add public art and create green spaces in the district. “It’s very valuable, especially talking about the growth of our city and the future of it,” says McCall.

Virginia Beach's ViBe Creative District

Hampton Hampton Arts & Cultural District, created at the end of 2015, includes the historic downtown area of Hampton and the Phoebus neighborhood. “The district was created to encourage artsbased businesses and cultural institutions to locate or expand in

the district,” says Alison Eubank, placemaking planner for the City of Hampton. “It is also designed to highlight and strengthen the existing arts and cultural assets in the downtown Hampton and Phoebus areas in a connected way that creates synergy and additional foot traffic.”

Hampton's restored 1920s carousel is located within its arts and cultural district.

Virginia Beach Virginia Beach’s ViBe district spans roughly 15 city blocks near the oceanfront. Prior to its zoning as an arts district in 2015, the area was largely ignored, according to ViBe’s Executive Director Kate Pittman.

“People were just driving right by that area and going straight to the oceanfront,” she says.

Since its designation as an arts district, the area has seen more foot and vehicle traffic. ViBe now boasts more than two dozen businesses, green spaces and public art. It is also home to Virginia Beach’s first coworking space, a farmers’ market and an art market. Pittman expects the district will be home to more than 30 businesses by the end of 2018. “We see already, year-to-year, an increase in businesses opening, and 2018 will be a landmark year for that,” she says.

HAMPTON ROADS BUSINESS - 2018

11

Arts, Recreation & Tourism linked to the establishment of the arts and cultural district.”

Businesses locating in the district are eligible for permit fee and event fee waivers. Companies also may be eligible for certain grants.

Williamsburg

Williamsburg's arts district.

The arts district has seen an increasing number of visitors and new businesses since its inception, Eubank says. “While there are economic impacts from the new businesses and patrons, we cannot [quantify] what is

Williamsburg’s arts district, located in the city’s mid-town, provides tax incentives to creative companies and artists who do business in the district.

Businesses, for example, can receive a rebate on their business licenses and waivers on fees for building and zoning permits. According to Michele DeWitt, Williamsburg’s economic development director, the district’s commercial vacancy rate has decreased from 22 percent since its inception in 2011 to 6 percent in 2017. Williamsburg City Councilman Benny Zhang says the district is still working to attract more foot traffic, but he’s hopeful the upcoming Midtown Row development, featuring a mix of residential and commercial de-

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business in the region

Vol. 1

Portsmouth Cultural Arts District.

velopment, will draw more people from the city’s downtown to the district. “It’s just a matter of timing and resolving those logistical issues one-by-one,” he says. “It’s going to be a gradual process, it’s not going to be a one [size] fits all remedy.”

Portsmouth Portsmouth’s arts district had been a local and regional hotspot for the arts long before its official designation in 2017. The area now known as The Portsmouth Cultural Arts District was already home to the Portsmouth Art & Cultural Center, the Children’s Museum of Virginia and several studios and antique shops. “When we decided to get it designated officially, our argument was that we already had an arts district,” says Karen Burgess, a volunteer and member of The Portsmouth Museum and Fine Arts Commission, which spearheaded the project. “Why not get the designation and gain the benefits for attracting tourists to the area?”

The city is planning to officially launch its arts district this fall, probably around October, Burgess says.

The goal is to “announce to everybody, tourists and residents, that we are an arts district and these are the things we have in downtown Portsmouth.”

Photos by Mark Rhodes

Standing out from the pack Experience is key for corporate meetings and conventions

by Veronica Garabelli hen meeting planners VisitNorfolk's Sam book space, they’re Rogers says looking for more than traffic generated square footage, banquet caby meetings and the tourism pacity and number of hotel industry generated rooms, though those logisti$785 million in cal details are important too. expenditures in the “They’re thinking about the city in 2016. experience their attendees will have,” says Sam Rogers, interim president and CEO at VisitNorfolk, a nonprofit that markets the waterfront city to travelers.

Several properties in the region are capitalizing on that trend by offering distinct experiences and meeting venues, from a glass studio in Norfolk to a distillery at the newly renovated Cavalier Hotel in Virginia Beach.

The historic hotel reopened earlier this year and also includes three restaurants.

In Newport News, the former site of the Omni and Magnuson hotels relaunched earlier this year as the

W

Holiday Inn Newport News - City Center. The hotel offers 10,000 square feet of meeting space, including the new “Enterprise” room. The board room, named after the first nuclear-powered aircraft carrier built at Newport News Shipbuilding, has a desk fashioned in the hull of a ship.

Liz Parker, general manager at the hotel and head of Newport News Hospitality Association, says the city has seen an uptick in meetings in the past two years. “More and more people want to be emotionally connected,” she says.

Norfolk also has been successful at attracting meetings but is conducting a survey to help it draw larger corporate meetings and conventions. VisitNorfolk’s Rogers says traffic generated by the meetings and tourism industry generated $785 million in expenditures in the city in 2016 and accounted for 700,900 full-time jobs. Rogers points out the city does host major gatherings, such as Dollar Tree’s annual meeting. “The question is how do we attract more of them?”

Largest meeting and convention facilities Guest rooms

Banquet capacity

Available meeting space (square feet)

N/A

9,400

210,470

Embassy Suites by Hilton Hampton Hotel Convention Center & Spa Hampton

295

4,000

192,384

The Hampton Coliseum Hampton

N/A

N/A

84,827

Norfolk Waterside Marriott Norfolk

405

1,400

68,879

Norfolk Scope Norfolk

N/A

3,000

64,000

Hilton Norfolk The Main Norfolk

300

1,200

50,000

295

1,600

48,000

466

1,200

46,000

Williamsburg Lodge Williamsburg

323

1,000

45,000

Chesapeake Conference Center Chesapeake

N/A

1,300

39,000

Fort Magruder Hotel and Conference Center Williamsburg

303

500

26,000

240

1,000

25,000

N/A

540

25,000

Facility

Location

Virginia Beach Convention Center Virginia Beach

DoubleTree by Hilton Hotel Williamsburg Williamsburg Sheraton Norfolk Waterside Hotel Norfolk

Founders Inn and Spa Virginia Beach Half Moone Cruise and Celebration Center Norfolk N/A: Not available or not applicable

Note: Sample of facilities with at least 25,000 square feet of meeting space.

Source: Individual facilities

HAMPTON ROADS BUSINESS - 2018

13

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CONSTRUCTION & REAL ESTATE

Range of projects underway

by Jessica Sabbath

F

rom a host of mixed-use developments to expanded terminal capacity at the Port of Virginia, many major construction projects are going up in Hampton Roads. (For more projects, see page 16 and 17).

Several major headquarters expansion projects are underway, including a new headquarters for Dollar Tree in Chesapeake, Ferguson Enterprise’s new seven-story headquarters building in Newport News and Stihl Inc.’s expansion of its 21,000-square-foot administration building in Virginia Beach to 80,000 square feet.

Still, office space remains tight in the region, according to recent market reports from local commercial real estate firms. Rent prices are on the rise, according to reports from Cushman & Wakefield | Thalhimer and JLL for the second quarter of 2018.

Space also is tight in the region for the industrial market. “Due to the shortage of Class A inventory, tenants are forced to make compromises in quality,” says Cushman & Wakefield | Thalhimer’s Market Beat Industrial report. “As the Port of Virginia increases TEU volumes, demand for warehouse space will not abate. Current low rents coupled with scarcity of industrial land sites will limit new construction.”

Photo by Mark Rhodes

Major commercial real estate firms Company

Number of brokers1

Managed square feet1

Leasable square feet1

Divaris Real Estate

22

9,187,071

17,529,172

CBRE

41

8,789,842

17,198,825

Cushman & Wakefield | Thalhimer

32

5,222,206

15,455,906

Harvey Lindsay Commercial Real Estate

32

6,883,598

11,046,416

S.L. Nusbaum Realty Co.

30

3,025,212

6,027,714

JLL

6

1,884,783

6,011,613

Colliers | Hampton Roads

3

0

3,763,141

Riddle Associates Inc.

8

1,875,000

2,710,000

Wheeler Real Estate Investment Trust

13

2,535,847

2,371,901

Venture Realty Group

10

2,869,850

2,146,895

Pembroke Commercial Realty LLC

5

2,439,876

2,041,477

The Shopping Center Group

5

552,000

1,300,000

Harbor Group International

0

1,201,552

859,317

The Runnymede Corp.

5

815,700

815,700

Robert Brown & Associates LLC

2

625,295

625,295

Hamner Development Co.

2

870,972

555,163

1 In Hampton Roads

Source: Individual firms

HAMPTON ROADS BUSINESS - 2018

15

Const ruuctioon & Rea l Estat e

Under construction Barry Art Museum

A sample of projects under development.

Norfolk The two-story, 24,000square-foot building will house the art collection from Carolyn K. and Richard F. Barry. Scheduled to open in mid-November, The Barry Art Museum will include international glass sculptures, 20thcentury American modernist paintings, historic fashion dolls and European automata (sculptures that simulate human movement). The museum also will include gallery space dedicated to educational activities for children and young adults. The Old Dominion University Museum Foundation will operate the museum. The museum is designed by Virginia Beachbased Saunders + Crouse Architects and built in partnership with the ODU Real Estate Foundation.

Element Hotel at Peninsula Town Center Hampton The $17 million Element Hotel at Peninsula Town Center is scheduled to open in fall 2018. The 120-room hotel received support from the Virginia Tourism Corp.’s Tourism Development Financing Program. The upscale hotel is expected to have a local tax benefit of $234,000 in its first full year of operation and have an economic impact of more than $2 million annually.

Global Technical Systems manufacturing center Virginia Beach The company is spending nearly $55 million on a new electro-mechanical storage system manufacturing operation. The 500,000-square-foot advanced manufacturing center will be built on 30 acres and will produce 100 percent green energy. The project is expected to create 1,100 new jobs. The center is expected to be operational in 2019.

16

HAMPTON ROADS BUSINESS - 2018

Renderings courtesy individual companies Photos by Mark Rhodes

Midtown Row Williamsburg Deemed the new “Gateway to Williamsburg”, this mixed-use development includes the redeveloped Williamsburg and Monticello Shopping centers. Health food grocer Earth Fare already is open, and four residential buildings are expected to be completed in 2020. In total, the development will include 242,121 square feet of retail, including 61,000 square feet of new retail and 181,121 square feet of renovated stores. The expansion will include 240 apartments with accommodations for up to 650 new residents and a proposed 135-room hotel.

Bethesda, Md.-based Broad Street Realty is developing the project.

Tech Center Research Park Newport News Construction continues on the 80,000-square-foot Building One @ Tech Center at the 50-acre Tech Center Research Park. The project is a partnership involving W.M. Jordan Co., Virginia Tech and the City of Newport News.

The research park is adjacent to the Thomas Jefferson National Accelerator Facility (Jefferson Lab), one of 17 national laboratories funded by the U.S. Department of Energy. The research park is part of a 100-acre development that includes Marketplace at Tech Center and Venture Apartments.

Summit Pointe Chesapeake

S.B. Ballard Stadium Norfolk Old Dominion University is undergoing a construction plan to rebuild and expand its football stadium. The $65 million project is expected to be complete by the home opener of the 2019 football season. It includes a new press box, seating, entrances, concessions, as well as sound and lighting systems.

It will be configured for future expansion. ODU’s department of Design and Construction is working with Intercollegiate Athletics and a design and construction management team including Moseley Architects, Populous and S.B. Ballard Construction Co.

The finishing touches are being put on the first phase of the Summit Pointe development in Chesapeake.

The 510,000-square-foot headquarters for Dollar Tree Inc. will be the tallest building in the city. Overall, the $300 million development is zoned for 1 million square feet of office space, more than 1,400 residences, up to 500,000 square feet of retail space and 250,000 square feet of hospitality and conference space. A piazza at the heart of the development is expected to serve as a venue for outdoor musical events, festivals and other functions.

A boutique hotel also is part of future development plans.

HAMPTON ROADS BUSINESS - 2018

17

EDUCATION & WORKFORCE

The College of William & Mary kicked off the academic year with a new president: Katherine A. Rowe.

Photo by Mark Rhodes

A changing landscape Several projects underway for region’s educational institutions

by Veronica Garabelli rom fresh initiatives to new leadership, educational institutions in Hampton Roads continue to evolve.

Norfolk-based Old Dominion University, which has the highest enrollment out of the public, four-year universities in the region, has unveiled several new programs. The college launched a master’s program in cybersecurity this fall. In May the college also graduated its first class of students receiving a bachelor’s degree in cybersecurity.

ODU has created the Institute for Innovation and Entrepreneurship, which consolidates the school's entrepreneurial organizations. It includes the Center for Enterprise Innovation; the Strome Entrepreneurial Center; and innovation centers in Norfolk and Chesapeake. The institute was born out of a need to better organize the university’s entrepreneurial activities. For example, when Virginia announced the GO Virginia initiative, which awards grants to promote economic development, ODU found itself unprepared. "We had all of these faculty members wanting to go after GO Virginia grants," but the school had no process to help them with the application, Larry “Chip” Filer, the Institute for Innovation and Entrepreneurship’s new leader, said in a statement earlier this year. “It was the wild, wild west."

The College of William & Mary also tapped a new leader after the retirement of W. Taylor Reveley III. Katherine A. Rowe became the college’s first female president in July. She is the former provost at Smith College, one of most prestigious women’s colleges in the United States. In addition to a new president, the campus is getting several new buildings. That includes a new wellness center and a new residence hall that were scheduled to open this fall.

F

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HAMPTON ROADS BUSINESS - 2018

School enrollment Locality

Fall 2017 enrollment

Graduation rate1

Chesapeake

40,656

92.7%

Franklin

1,119

86.7

Gloucester

5,439

90.4

Hampton

19,911

91.5

Isle of Wight

5,476

93.8

Mathews

1,082

91.6

Newport News

28,684

93.5

Norfolk

30,787

81.3

Poquoson

2,129

94.7

Portsmouth

14,339

86.6

Southampton

2,800

89.2

Suffolk

14,359

87.1

Surry

792

88.1

Virginia Beach

68,986

91.9

Williamsburg/James City

11,853

92.3

York

12,821

95.2

1 On-time graduation rate for class of 2017. The rate represents the percentage of students in a cohort who earned a Board of Education-approved diploma within four years of entering high school for the first time.

Source: Virginia Department of Education

Four-year colleges and universities Christopher Newport University Newport News www.cnu.edu More than 90 areas of study President: Paul S. Trible Jr. Tuition and fees, plus room-andboard: $26,214 Student-to-faculty ratio: 15:1 Enrollment: 5,000

Eastern Virginia Medical School Norfolk www.evms.edu Twenty-two graduate and doctoral degrees and a range of certificate programs President: Dr. Richard V. Homan Tuition and fees2: $31,820 Enrollment3: 1,261

Hampton University Hampton www.hamptonu.edu More than 80 academic programs President: William R. Harvey Tuition and fees, plus room-andboard: $38,230 Total enrollment1: 4,619

Norfolk State University Norfolk www.nsu.edu Five academic colleges and schools Interim president: Melvin T. Stith Sr. Tuition and fees, plus room-andboard: $19,850 Student-to-faculty ratio: 20:1 Enrollment: 5,350

Old Dominion University Norfolk www.odu.edu Eight colleges and a graduate school President: John R. Broderick Tuition and fees, plus room-andboard: $22,567 Student-to-faculty ratio: 18-1 Enrollment1: 24,375

Regent University Virginia Beach www.regent.edu Seven schools and two colleges, undergraduate through doctoral level Founder, chancellor and CEO: M.G. “Pat” Robertson

Tuition and fees, plus room-andboard: $26,460 Student-to-faculty ratio: 20:1 Enrollment: 10,539

Virginia Wesleyan University Virginia Beach www.vwu.edu Five colleges and schools, undergraduate through graduate level President: Scott D. Miller Tuition and fees, plus room-andboard: $45,917 Student-to-faculty ratio: 13:1 Enrollment: 1,500

William & Mary Williamsburg www.wm.edu More than 80 undergraduate, graduate and professional degree programs President: Katherine A. Rowe Tuition and fees, plus room-andboard4: $35,636 Student-to-faculty ratio: 11:1 Enrollment1: 8,740

Community Colleges Paul D. Camp

Thomas Nelson

Tidewater

Franklin and Suffolk www.pdc.edu Sixty-two programs of study President : Daniel W. Lufkin Tuition and fees: $4,729 Student-to-faculty ration: 17:1 Enrollment1: 1,404

Hampton https://tncc.edu More than 80 areas of study President: John T. Dever Tuition and fees: $4,806 Student-to-faculty ratio: 21:1 Enrollment3: 12,210

Chesapeake, Norfolk, Portsmouth and Virginia Beach www.tcc.edu Nine career pathways with 58 associate degree programs President: Gregory T. DeCinque Tuition and fees: $5,560 Student-to-faculty ratio: 22:1 Enrollment1: 32,982

Sources: State Council of Higher Education for Virginia, colleges and universities Note: Unless noted, tuition reflects most recent tuition for undergraduate, in-state students. Enrollment data are for 2018-2019 academic year unless footnoted.

1 Fall 2017 2 Tuition and fees for in-state students pursuing a Doctor of Medicine degree.

3 For 2017-2018 academic year.

4 This figure is for in-state freshmen. For new students, tuition charged in their freshman year is frozen for all four years of their attendance at the school.

HAMPTON ROADS BUSINESS - 2018

19

Education & Workforce

Tidewater Community College

The Apprentice School Photo by John Whalen/Newport News Shipbuilding

Photo courtesy Goodwill Industries/Facebook

Photo courtesy Tidewater Community College

Paul D. Camp Community College

Goodwill Industries

Photo courtesy Paul D. Camp Community College

A sample of work force development resources in Hampton Roads The Apprentice School

New Horizons Regional Education Centers

The Newport News Apprentice School of Shipbuilding is managed by Newport News Shipbuilding to augment its workforce of more than 20,000 employees. The company, which builds U.S. Navy aircraft carriers and is one of two providers of U.S. Navy submarines, is a division of Huntington Ingalls Industries. Apprenticeships are offered in 19 shipbuilding disciplines and eight advanced programs of study, including marine engineering and modeling and simulation program analyst.

Online: www.as.edu

The centers serve individuals in Hampton, Newport News, Poquoson, Williamsburg and the counties of Gloucester, James City and York. The centers include The Career and Technical Education Center, which trains 1,000 high school students in seven career paths and 22 training programs.

The Advanced Technical Careers Academy trains high school juniors and seniors for careers in the automotive, construction and manufacturing fields. Courses include mechatronics, welding and building construction.

Online: www.nhrec.org

Goodwill Industries

Opportunity Inc.

Goodwill operates programs that help jobseekers and connect employers with qualified applicants. Those looking for work can use their Community Employment Centers to fine-tune their résumés, prep for interviews and find job leads. It also runs a staffing service for employers looking for temporary or temp-to-permanent employees.

Recruitment areas for Goodwill Staffing Solutions’ include customer service, light industrial and administrative.

Online: goodwillvirginia.org

Opportunity Inc., operated by the Hampton Roads’ Workforce Development Board, is an employment resource for job seekers, workers and employers in the area.

Opportunity Inc.’s Workforce Centers can help employers find qualified workers, provide labor market information and offer interview facilities, for example. Job seekers can stop by the centers to develop their résumés, learn interview skills and find job referrals.

Online: www.opp-inc.org

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HAMPTON ROADS BUSINESS - 2018

Paul D. Camp Community College

Thomas Nelson Community College

The Paul D. Camp Community College’s Division of Workforce Development offers a variety of options to meet the needs of employers in western Hampton Roads. The college offers courses for professional development, customized employee training and advice for business startups and expansions. Courses are available for various industries including information technology, manufacturing and transportation.

Online: www.pdc.edu/workforce-development

TNCC’s Workforce Development provides workforce training for individuals and employers in the Virginia Peninsula.

The college creates customized programs for companies on-site, online or at its locations in Hampton and Williamsburg. Courses and programs cover manufacturing and trade skills, business and entrepreneurship, and technology and health care, among other areas. TNCC is an American Welding Society (AWS) Accredited Testing Facility with Certified Welding Inspectors who can conduct the AWS certification.

Online: www.tncc.edu/workforce

Peninsula Council for Workforce Development The Peninsula Council for Workforce Development’s mission is to identify the workforce development needs of jobseekers, youth and employers and develop and implement solutions through partnerships that address these needs. The council’s Peninsula Worklink One-Stop Career Centers assist jobseekers and employers. Job seekers, for example, can use the centers’ resources for career planning or résumé development. Businesses can use the facilities for worker training or to access labor market information.

Online: www.pcfwd.org

Tidewater Community College Tidewater Community College’s Center for Workforce Solutions offers the Southside, Peninsula and Western Tidewater communities a variety of workforce training options. The college’s maritime and transportation programs offer courses in maritime logistics and transportation. That includes opportunities to earn a commercial driver’s license or U.S. Coast Guard captain’s license. TCC’s Virginia Beach campus is home to the Advanced Technology Center, which aims to meet employers’ demands for a well-trained workforce.

Online: www.tccworkforce.org

HAMPTON ROADS BUSINESS - 2018

21

FINANCE

Market leader TowneBank continues to report largest market share

A

locally owned bank continues to have the largest market share in Hampton Roads. Suffolk-based TowneBank held 22 percent of the region’s deposits as of June 30, 2017, according to data from the Federal Deposit Insurance Corp. The bank’s market share increased slightly from the same time period in

2016, when it held 21.5 percent of deposits. TowneBank has 40 offices in Virginia and North Carolina.

The bank has local branches in Chesapeake, Hampton, Newport News, Norfolk, Portsmouth, Suffolk, Virginia Beach, Williamsburg, and York and James City counties.

Largest regional credit unions Institution

Headquarters

Members

Assets

Langley Federal

Newport News

244,298

$2,620,068,327

Chartway Federal

Virginia Beach

181,676

2,162,139,487

BayPort

Newport News

140,958

1,792,956,772

1st Advantage

Yorktown

62,200

692,167,581

ABNB Federal

Chesapeake

57,140

571,298,013

Bronco Federal

Franklin

18,143

181,736,186

NAE Federal

Chesapeake

18,871

129,897,145

Beach Municipal Federal

Virginia Beach

9,618

119,742,790

PortAlliance Federal

Norfolk

11,530

95,388,403

Virginia Beach Schools Federal

Virginia Beach

7,614

95,112,156

Northern Star

Portsmouth

9,571

86,066,163

Virginia Educators

Newport News

6,141

66,368,417

NMA Federal

Virginia Beach

8,130

59,414,093

Source: National Credit Union Administration Note: Includes largest credit unions based in Hampton Roads. Data are from June 2018 call reports.

Photo by Mark Rhodes

Largest banks in Hampton Roads Institution

Headquarters

Local offices

Deposits ($000)1

TowneBank

Suffolk

26

$5,482,851

Wells Fargo Bank, National Association

San Francisco

51

4,733,299

19.00

22.01%

SunTrust Bank

Atlanta

36

4,005,803

16.08

Branch Banking and Trust Co. (BB&T)

Winston-Salem, N.C.

47

3,296,583

13.23

Bank of America, National Association

Charlotte, N.C.

33

3,041,138

12.21

Xenith Bank 2

Richmond

22

994,997

3.99

The Old Point National Bank

Hampton

21

780,438

3.13

Southern Bank and Trust Co.

Mount Olive, N.C.

11

436,698

1.75

PNC Bank, National Association

Pittsburgh

11

379,202

1.52

Chesapeake Bank

Kilmarnock

8

378,562

1.52

Farmers Bank

Windsor

6

308,868

1.24

Fulton Bank, National Association

Lancaster, Pa.

6

232,896

0.93

Citizens and Farmers Bank

West Point

6

218,677

0.88

Union Bank & Trust2

Richmond

5

175,431

0.70

SONABANK

Glen Allen

5

165,497

0.66

1 As of June 30, 2017

22

Market share1

2 Union Bank & Trust acquired Xenith Bank in January 2018.

HAMPTON ROADS BUSINESS - 2018

Source: Federal Deposit Insurance Corp.

Expanded team.

Deeper expertise.

Bringing Hampton Roads more of the best in commercial banking.

Andy Hodge, Regional President, has added even greater scope and expertise to his Hampton Roads commercial banking team. From helping you manage your everyday business banking to lining up and closing complex deals, we’re ready to work for you. See for yourself why MONEY Magazine selected Union as 2018 “Best Bank in Virginia”.

80 0.990. 4828 BA N K AT U N I O N .CO M MONEY is a registered trademark of Time Inc. and is used under license. From MONEY Magazine, November 1, 2017. ©2017 Time Inc. Used under license. MONEY and Time Inc. are not affiliated with, and do not endorse products or services of, Union Bank & Trust.

HEALTH CARE

Health systems, colleges planning health-care ventures Sentara BelleHarbour's new hospital in Suffolk would include 20 inpatient beds.

Rendering courtesy Sentara Health System

by Jessica Sabbath

F

rom new hospitals to expanded education, a wide range of health-care-related developments are underway in Hampton Roads. That includes two health systems that want to build new hospitals in Northern Suffolk.

Sentara Healthcare has asked the state to approve its plans to build a 20-bed hospital on its Sentara BelleHarbour campus. The hospital would include 20 inpatient beds, two operating rooms and a CT scanner.

Meanwhile, Bon Secours has filed an application for a Certificate of Public Need to build a new hospital at its Harbour View campus in Northern Suffolk. The plan includes transferring up to 25 hospital beds and four operating rooms from Bon Secours Maryview Medical Center in Portsmouth.

Sentara Healthcare also has begun a multiyear fundraising and development effort to build a $93.5 million cancer center at its Sentara Leigh Hospital campus in Norfolk.

Development also is expanding on the Peninsula. Riverside Doctors’ Hospital Williamsburg is in the midst of a hospital expansion that includes a third operating room, new diagnostic space and ad-

24

HAMPTON ROADS BUSINESS - 2018

ditional square footage. The project is expected to be complete in early 2019.

In spring 2018, Riverside Health System also broke ground on a $25 million Riverside Rehabilitation Hospital in York County. The 50-bed, 52,000-square-foot hospital is expected to open in summer 2019. It is moving from its current location in Newport News.

Higher education institutions also are sparking health-care-related development. Old Dominion University is planning to build a $75 million health sciences building in Norfolk in the next several years. The school also is expanding its health sciences program at the Virginia Beach Higher Education Center by an additional 850 students. ODU also expects to open a primary-care clinic, a substanceabuse prevention center and a training center for patient simulation in the city.

Regent University opened its College of Healthcare Sciences and School of Nursing this fall, initially offering bachelor’s and master’s degrees in nursing, master’s degrees in health-care informatics and health-care administration, and a doctorate in nursing practice.

Acute-care general hospitals

1

Hospital

Location

No. of licensed beds

Sentara Norfolk General Hospital

Norfolk

525

$883,438,377

Riverside Regional Medical Center

Newport News

577

571,359,735

Bon Secours Maryview Medical Center

Portsmouth

346

355,456,126

Sentara Virginia Beach General Hospital

Virginia Beach

276

327,272,183

Chesapeake Regional Medical Center

Chesapeake

310

314,713,802

Sentara Leigh Hospital

Norfolk

250

313,131,844

Sentara Princess Anne Hospital

Virginia Beach

160

265,612,339

Sentara CarePlex Hospital

Hampton

224

247,634,709

Sentara Obici Hospital

Suffolk

168

209,409,065

Bon Secours DePaul Medical Center

Norfolk

180

188,693,157

Bon Secours Mary Immaculate Hospital

Newport News

123

181,613,868

Sentara Williamsburg Regional Medical Center

Williamsburg

145

164,140,722

Riverside Walter Reed Hospital

Gloucester

67

71,051,332

Southampton Memorial Hospital

Franklin

90

63,107,984

Riverside Doctors' Hospital Williamsburg

Williamsburg

40

36,935,285

For Fiscal Year ended 2016

Net patient revenue1

Source: Virginia Health Information

Specialty hospitals Hospital

Location

Specialty

Licensed beds

Net patient revenue1

Children's Hospital of the King's Daughters

Norfolk

Pediatric

206

319,473,296

Virginia Beach Psychiatric Center

Virginia Beach

Psychiatric

100

21,919,727

Lake Taylor Transitional Care Hospital

Norfolk

Long-term acute

104

19,025,093

Coastal Virginia Rehab

Newport News

Rehabilitation

50

16,272,128

Kempsville Center for Behavioral Health

Norfolk

Psychiatric

82

14,801,903

The Pavilion at Williamsburg Place

Williamsburg

Psychiatric

57

14,253,204

Hampton Roads Specialty Hospital

Newport News

Long term acute

25

9,595,853

Hospital for Extended Recovery

Norfolk

Long term acute

35

9,459,802

1 For Fiscal Year ended 2016

Source: Virginia Health Information

HAMPTON ROADS BUSINESS - 2018

25

INDUSTRY & BUSINESS

INDUSTRY & BUSINESS

Growing economy Expansions include 2,000 new shipbuilding jobs

T

he region is home to many types of businesses, from major corporations to small startups. Some of Virginia’s fastest-growing companies are located in the region as well and are highlighted here. This section also examines the biggest and most recent economic development announcements. That includes

plans from Newport News Shipbuilding to create 2,000 new jobs. The shipyard will need more workers to build new submarines, as well as to construct and maintain aircraft carriers. The company also plans to retrain employees over the next five years and invest $1 billion in its facilities and technology infrastructure.

On the fast track A look at some of the growing companies in the region

H

ampton Roads is home to some rapidly growing firms.

Ten local businesses made Virginia Chamber’s 2018 Fantastic 50 list of the fastest-growing private companies in the commonwealth. Dixon Hughes Goodman determined the winners by looking at financial records and comparing the companies’ revenue growth from 2013 to 2016. To be eligible for the list, a company must have recorded revenue of at least $200,000 in 2013. It also must post a profit in 2016 and have revenue of less than $200 million in its most recent fiscal year. Winners were honored at a banquet held in late April at the Westfields Marriott Washington Dulles hotel in Chantilly. Hampton Roads Business reached out to the local players on this year’s Fantastic 50 list to see how business is going. Here's an update on some of the companies.

Super Systems Inc. (SSi) Virginia Beach Fantastic 50 rank .................................................................. #6 Year established ................................................................1988 No. of employees.................................................................145 2016 revenue ......................................................... $10,621,060 2017 revenue ......................................................... $13,254,490 ’13-’16 revenue growth........................................831.6 percent Super Systems Inc. is a staffing agency serving clients in the health-care, information technology and government sectors. Clients include Leidos, Northrop Grumman, AT&T and IBM. The firm was started in 1988 in Hartford, Conn. It began operations in Virginia around 2013 when it was rebranded by John Renals and his brother-in-law Mike Kreider. The company moved its headquarters to Virginia Beach in 2015. Super Systems Inc. continues to grow by adding employees and contracts. It is aiming to reach $16 million in revenue this year.

26

HAMPTON ROADS BUSINESS - 2018

Virginia Foundation Solutions Inc. Virginia Beach Fantastic 50 rank ................................................................ #23 Year established ................................................................2012 No. of employees.................................................................. 31 2016 revenue ........................................................... $3,171,607 2017 revenue ............................................... Would not disclose ’13-’16 revenue growth........................................421.4 percent Founded in 2012 by U.S. Navy veteran Daniel Farris, Virginia Foundation Solutions provides foundation, structural and crawlspace repair; encapsulation systems and waterproofing services. In September, the company is moving within Virginia Beach, from a 1,500-square-foot office on Seahawk Circle to a facility on Lynnhaven Parkway with 25,000 square feet of office and warehouse space. The company says the new space will allow it to hire additional employees.

SOLitude Lake Management Virginia Beach Fantastic 50 rank ................................................................ #31 Year established ................................................................1998 No. of employees................................................................ 263 2016 revenue ............................................... Would not disclose 2017 revenue ......................................................... $26,475,954 ’13-’16 revenue growth....................................... 362.2 percent SOLitude Lake Management manages lakes, ponds, wetlands and fisheries. Clients range from colleges and universities to golf courses and hotels. The company was started in 1998 by Kevin Tucker, a former landscaper who wanted to provide freshwater management solutions to improve water quality, enhance beauty and protect natural resources. The company has grown an average of more

than 20 percent per year, including several acquisitions.

ITA International LLC Yorktown Fantastic 50 rank ........................... #39 Year established .......................... 2005 No. of employees......................... 350+ 2016 revenue ..........Would not disclose 2017 revenue ..........Would not disclose ’13-’16 revenue growth... 312.1 percent ITA International started as a marine business in 2000 and then shifted to government contracting in 2003. “I had always wanted to own my own business,” says Mike Melo, ITA International’s founder and CEO. “After I retired from the Navy in 2002, I worked at Old Dominion University as director of troops to teachers for three years as I transitioned from the Navy and pursued that first government contract.” The company was awarded its first government contract in August 2005. Today, ITA International serves customers in the public and private sectors. It offers analysis, planning, training, acquisition management, cyber/intelligence,

engineering, logistics and maritime support. The company expects its revenue to grow more gradually this year, about 15 percent, compared to its 2017 revenue.

Divurgent LLC Virginia Beach Year established .......................... 2007 Fantastic 50 rank ............................#43 No. of employees............................192 2016 revenue .......... Would not disclose 2017 revenue .................... $44,000,000 ’13-’16 revenue growth......... Would not disclose Divurgent is a health-care consulting firm with services ranging from cybersecurity to financial advising.

The firm expects to continue to grow organically and achieve 25 percent year-over-year revenue growth.

JES Foundation Repair, a Groundworks company Virginia Beach Fantastic 50 rank ............................#50 Year established ............................1993 Current no. of employees ...............287 2016 revenue ........... Would not disclose

2017 gross revenue ............$61,387,118 ’13-’16 revenue growth....216.4 percent JES Foundation Repair provides foundation repair, underpinning, crawl space encapsulation and moisture management, basement waterproofing and concrete lifting and leveling services.

The company was founded in 1993 by Professional Engineer and VMI graduate Jesse Waltz and his wife, Stella. It rapidly grew throughout the Mid-Atlantic and by 2016 included offices in Virginia Beach, Richmond, Manassas, Lynchburg and Indianapolis. In May of 2016, Matt Malone and his private equity firm, Succession Capital Partners, acquired 60 percent controlling shares of JES. Malone took over as CEO. In 2018, the Groundworks companies was created as the umbrella entity that now included five brands – JES Foundation Repair, Tar Heel Basement Systems, Mount Valley Foundation Services, Foundation Recovery Systems and Indiana Foundation Service. Virginia Beach-based Groundworks operates out of 15 offices that serve Arkansas, Georgia, Indiana, Iowa, Kansas, Maryland, Missouri, North Carolina, South Carolina, Virginia and West Virginia.

Largest new operations Investment (in millions)1

Jobs1

Company

Location

Primary product/service

Atlantic Core Building Products

Chesapeake

Manufacturer of steel commercial construction materials

$3.0

50

U-Play

Virginia Beach

Manufacturer of wet wipes, incontinence pads, and puppy training pads

4.9

38

Assured Communications Advisors International

Virginia Beach

Headquarters: Tier III data center

52.0

30

TQ Systeme

Chesapeake

Design and engineering firm for electronic subsystems and systems

0.0

20

Welspun USA Inc.

Suffolk

Company distributes linens and towels for its retail and hospitality customers

1.0

16

Atarfil SL

Suffolk

Manufacturer of thermoplastic geomembranes

5.1

15

Seigler Reels

Virginia Beach

Headquarters; manufactures fishing reels

0.98

12

AGF Machining

Chesapeake

Canadian manufacturer; vendor for TDIKriss

0.5

10

1 Projected at time of announcement.

Source: Virginia Economic Development Partnership

Note: Includes announcements made between 2017 and up until Aug. 17, 2018. Includes only publicly released announcements.

HAMPTON ROADS BUSINESS - 2018

27

Industry & Business Largest expansions Investment (in millions)1

Jobs1

Company

Location

Primary product/service

Newport News Shipbuilding (HII)

Newport News

Shipbuilding and repair

$8.7

2,000

Global Technical Systems

Virginia Beach

Electromechanical energy storage system manufacturing

54.7

1,110

Geico Corp.

Virginia Beach

Finance and insurance

0.0

500

Ferguson Enterprises

Newport News

Largest U.S. plumbing wholesaler

82.8

434

Ferguson Enterprises

Hampton

Warehouse/distribution of plumbing supplies

1.3

364

LifeNet Health

Virginia Beach

Regenerative medicine company expanding its HQ, R&D and warehouse facilities

12.3

321

Tegra Global

Norfolk

Apparel manufacturer and supply chain provider

4.0

300

Maximus

Hampton

Call center to support federal government contracts

0.6

230

Standard Calibrations Inc.

Chesapeake

Sensor and instrumentation calibration, repair, and configuration

0.5

150

J&F Alliance Group

Hampton

Augmented reality and integrated logisitcs

0.1

119

1 Projected at time of announcement Note: Includes announcements made between in 2017 and up until Aug. 17, 2018. Includes only publicly released announcements.

Source: Virginia Economic Development Partnership

Startup Resources – Hampton Roads The entrepreneurial spirit is growing in Hampton Roads, and there are several organizations, incubators and private companies that exist to help startup businesses thrive. Following is a sample of the many resources.

Hampton University Business Incubator hubi.hamptonu.edu

REaKTOR Business Technology Innovation Center reaktoraccelerator.org

Hatch www.startwithhatch.com

ReInvent Hampton Roads reinventhr.org

Ignition ignitioncenter.com

StartWheel startwheel.org

Ernest M. Hodge Institute for Entrepreneurship nsu.edu

Innovation Research Park @ ODU irpodu.com

Strome Entrepreneurial Center odu.edu/univ-impact/entrepreneurship/ strome# W31rui2ZNp9

Franklin Business Incubator downtownfranklinva.org/page/franklinbusiness-incubator

Institute for Innovation & Entrepreneurship odu.edu/univ-impact/entrepreneurship

Hampton Roads Innovation Collaborative technologyhamptonroads.com

Launchpad, Greater Williamsburg Business Incubator gwlaunchpad.com

Hampton Roads SCORE hamptonroads.score.org

ODU Center for Enterprise Innovation odu.edu/cei#.WNlpTmT1CM8

757 Accelerate 757accelerate.org 757 Angels 757angelsgroup.com 757 Makerspace 757makerspace.com

28

HAMPTON ROADS BUSINESS - 2018

The Arsenal buildthearsenal.com Tidewater Business Financing Corp. tidewaterbusinessfinancing.com Virginia SBDC – Hampton Roads hrsbdc.org hrsmallbizloans.com Williamsburg SCORE williamsburg.score.org

Local economic development offices Chesapeake Economic Development (757) 382-8040 http://chesapeakeva.biz

Gloucester Economic Development (804) 693-1414 www.gloucesterva.info/217/ economic-development

Poquoson Economic Development (757) 868-3000 www.poquoson-va.gov/253/ economic-development

Franklin Southampton Economic Development Inc. (757) 562-1958 www.franklinsouthamptonva.com

Greater Williamsburg Partnership (844) 497-2020 www.gwpva.com

Portsmouth Economic Development (757) 393-8804 www.accessportsmouthva.com

James City County Office of Economic Development (757) 253-6607 www.yesjamescitycountyva.com

YesSuffolk (757) 514-4040 www.yessuffolk.com

Hampton Economic Development (757) 727-6237 http://hampton.gov/241/economicdevelopment Hampton Roads Economic Development Alliance (757) 627-2315 www.hreda.com Isle of Wight Economic Development (757) 356-1962 http://insidetheisle.com

Middle Peninsula Alliance (804) 399-8297 www.mpava.com

Virginia Beach Economic Development (757) 385-6464 www.yesvirginiabeach.com

Newport News Department of Development (757) 926-8428 http://newportnewsva.com

Williamsburg Economic Development (757) 220-6120 www.yeswilliamsburg.com

Norfolk Economic Development (757) 664-4338 www.norfolkdevelopment.com

York County Economic Development (757) 890-3317 www.yesyorkcounty.com

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MILITARY Sailors aboard the USS George H.W. Bush. Newport News Shipbuilding is the sole builder of nuclear-powered aircraft carriers for the U.S. Navy.

Increase in military spending expected to benefit region

T

Photo by Petty Officer 3rd Class Brooke Macchietto/courtesy United States Navy

he year 2018 brought positive news for the region’s military community.

This summer, President Trump approved $717 billion in defense spending for fiscal year 2019, which includes a 2.6 percent raise for activeduty troops. Through the John S. McCain National Defense Authorization Act, Trump also approved $24.1 billion for new Navy ships, including a fourth Ford-class aircraft carrier and three Littoral Combat Ships.

“We will replace aging

Hampton Roads military bases

tanks, aging planes and ships with the most advanced and lethal technology ever developed,” Trump said in August when the law was signed.

The money provides more work for Newport News Shipbuilding, whose more than 20,000 employees help build the Navy’s massive aircraft carriers and submarines.

The act only outlines a plan for defense spending, but Congress must still decide to allocate the funds.

Active-duty personnel

Civilian personnel1

Total

Naval Station Norfolk

55,131

20,672

75,803

Joint Expeditionary Base Little Creek-Fort Story

16,009

3,779

19,788

Naval Air Station Oceana/Dam Neck Annex

11,067

6,299

17,366

Norfolk Naval Shipyard

317

12,589

12,906

Naval Support Activity Hampton Roads/Northwest Annex/ Naval Medical Center Portsmouth

6,235

5,189

11,424

Naval Weapons Station Yorktown-Cheatham Annex

1,648

1,433

3,081

Training Center Yorktown

576

245

821

Coast Guard Base-Portsmouth

N/A

N/A

550

Joint Base Langley-Eustis (Air Force)

8,055

3,109

11,164

Joint Base Langley-Eustis (Army)

5,585

2,875

8,460

NAVY

COAST GUARD

ARMY/AIR FORCE

1 Civilian personnel may include contractors N/A: No Answer

30

HAMPTON ROADS BUSINESS - 2018

Source: Military bases, Navy and Joint Base Langley-Eustis' economic impact reports for Fiscal Year 2016

PORTS & SHIPPING

Deeper water Dredging project receives federal approval, state financial support

I

n a few years, the Port of Virginia will regain its status as the deepest port on the U.S. East Coast.

The port has received approval from the U.S. Army Corps of Engineers to dredge and widen its channels to support the massive container ships visiting the port’s marine terminals.

Now when ultra-large container vessels — which are longer than the length of three football fields — visit the port, the U.S. Coast Guard must close the channels to one-way traffic. That can create quite a bottleneck for a busy thoroughfare of commercial and Naval vessels.

The project will open the channels to two-way traffic, even when these colossal container ships call on the port. It also will allow these large ships to come in heavier, which could mean increased container volume for the port.

The Port of Virginia had the deepest channels for several years, until many ports began to dredge as ocean carriers began deploying larger and larger ships. The Port of New York and New Jersey and the Port of Miami now match Virgin-

Photo courtesy Port of Virginia

ia’s 50-foot water depth. The Port of Charleston is currently dredging to 52 feet.

The Port of Virginia project, which the state agreed to support with $350 million, will deepen channels to 55 feet. Design and engineering work began this summer, and construction should begin in 2020 and be complete by 2024.

But the deepening project is only part of the story. The Port of Virginia currently is undergoing projects worth almost $700 million to expand its two largest terminals. It is spending $320 million to expand the Virginia International Gateway in Portsmouth. The project, on schedule to be complete in June 2019, has about half of its new container stacks in service. By January its four new ship-to-shore cranes could be ready for use.

In addition, the port is expanding its largest terminal — Norfolk International Terminals. The first new container stacks are in service and additional container stacks will continue to be added until the project’s completion in June 2020.

Altogether, the two projects will expand the port’s capacity by 40 percent.

HAMPTON ROADS BUSINESS - 2018

31

Ports & Shipping Top 5 commodities by value EXPORTS1

IMPORTS1

1

Nuclear reactors, boilers, machinery

$3,572

Nuclear reactors, boilers, machinery

$9,830

2

Pharmaceutical products

2,066

Electrical machinery

3,937

3

Plastics

1,845

Vehicles, not railway

2,976

4

Vehicles, not railway

1,819

Furniture and bedding

2,718

5

Organic chemicals

1,187

Pharmaceutical products

2,548

1 In millions of U.S. dollars for 2017 at the Port of Virginia Source: U.S. Department of Commerce; U.S. Census Bureau; Virginia Maritime Association; Port of Virginia

Top 5 trading partners by total value EXPORTS1

IMPORTS1

1

China

$3,065

China

$11,193

2

Brazil

2,212

Germany

6,189

3

Belgium

1,947

India

2,845

4

United Kingdom

1,542

Italy

2,432

5

Germany

1,510

Japan

2,124

1 In millions of U.S. dollars for 2017 at the Port of Virginia Source: U.S. Department of Commerce; Census Bureau; Virginia Maritime Association; Port of Virginia Photo by Mark Rhodes

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HAMPTON ROADS BUSINESS - 2018

Ports & Shipping

Ports & Shipping Air cargo handled at Hampton Roads airports1 Year

NIA

NNW

2017

66,508,335

95,512

2016

64,810,117

160,762

2015

59,408,676

28,835

2014

55,637,623

29,121

2013

58,113,441

34,042

1 In pounds

Source: Individual airports

East Coast market share Ports

TEUs1

1

New York/New Jersey

6,710,817

32.3%

2

Savannah, Ga.

4,046,216

19.5

3

Port of Virginia

2,841,020

13.7

4

Charleston, S.C.

2,177,557

10.5

5

Jacksonville, Fla.

1,107,551

5.3

6

Port Everglades, Fla.

1,068,335

5.1

7

Miami

1,047,304

5.0

8

Baltimore

962,484

4.6

9

Philadelphia

545,408

2.6

10

Wilmington, N.C.

259,819

1.3

NIA: Norfolk International Airport NNW: Newport News/Williamsburg International Airport

Market share

1 TEU: 20-foot equivalent unit Photo courtesy Norfolk International Airport

34

HAMPTON ROADS BUSINESS - 2018

Source: U.S. Department of Commerce; U.S. Census Bureau; Virginia Maritime Association; American Association of Port Authorities; The Port of Virginia

Export/import TEUs handled at Port of Virginia Export

Import

Total empties

Total TEUs

2017

1,014,570

1,276,335

550,112

2,841,016

2016

1,006,119

1,174,893

474,694

2,655,705

2015

997,828

1,082,520

468,922

2,549,270

2014

1,034,526

1,017,879

340,633

2,393,038

2013

998,843

934,119

290,571

2,223,532

Year

TEU: 20-foot equivalent unit.

Source: Port of Virginia

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Cincinnati 67

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35

RESEARCH

Innovation station

by Daniel Berti

W

ith eight nonprofit universities, three community colleges and several major research institutions, Hampton Roads is known as much for innovation as sandy beaches. Below is a sample of research initiatives and institutions based in the area. These organizations are working to solve some of the world’s toughest problems, ranging from sea-level rise to cancer.

The Commonwealth Center for Recurrent Flooding Resiliency (CCRFR) The center, created in 2016, aims to help localities and entities in the commonwealth deal with coastal and riverine flooding. CCRFR’s work is statewide, but much of its work takes place in Hampton Roads, where sea levels are some of the highest in the country. “We are a hotspot on the East Coast for sea level rise,” says Emily Steinhilber, research assistant professor at Old Dominion University, who is partnering on the center with the College of William & Mary’s Virginia Coastal Policy Center and Virginia Institute of Marine Science.

Hampton University Proton Therapy Institute The institute helps treat cancer with proton therapy, which uses a precision-focused radiation beam to target and treat benign and malignant tumors. When the facility opened in 2010 it was the fourth institute dedicated to proton therapy in the United States, though others have opened since then. Patients receive daily treatment for a number of weeks depending on the type, size and location of the tumor. “Unlike traditional radiation, which has a more generalized path that sends radiation through the tumor, proton radiation utilizes specific frequencies to help dial in the intended point of treatment,” the institute explains on its website.

Jones Institute for Reproductive Medicine at Eastern Virginia Medical School The Norfolk-based institute is credited with producing the first baby born through In Vitro Fertilization (IVF) in the United States in 1981. The institute’s clinical and research staff is made up of scientists whose goal is to help diagnose and treat infertility-related diseases.

Norfolk State University’s Center for Materials Research The organization conducts research in materials science and engineering. The center focuses on four research areas — optics, plasmonics and metamaterials; nanomaterials and nanotechnology; advanced functional materials and devices; and semiconductor materials and devices.

36

HAMPTON ROADS BUSINESS - 2018

The organization also educates students at the master’s and doctoral levels. Its outreach also extends to children.

In April, for example, it hosted NanoDays at the Children’s Museum of Virginia in Portsmouth. The event allowed children to dress up like nanoscientists, experiment with heat transfer and explore polarized light.

Riverside Center for Excellence in Aging and Lifelong Health (CEALH) The Williamsburg organization seeks to better meet the needs of aging adults. Research projects at the center explore dementia, behavioral health and caregiver support and education. In 2018, the center won a Best Practices Award from the Southern Gerontological Society for the Williamsburg Memory Café, which works to provide an informal environment where people with memory loss and their caregivers can socialize and engage with others experiencing the same issues. The café is led by volunteers and created through a partnership between CEALH and the Peninsula Agency on Aging.

NASA Langley Research Center The massive complex in Hampton focuses on research related to aviation, the Earth's atmosphere and space exploration. It is made up of nearly 200 facilities on 764 acres. Roughly 3,400 people work at the center. Current research ranges from how to help NASA safely land on Mars to developing technology to make airplanes safer and environmentally friendly. “Even now when you fly on an airplane, it’s likely that NASA-inspired technology is onboard,” NASA Langley Director Dave Bowles said in the organization’s most recent annual report. Last year, NASA Langley celebrated its 100th anniversary.

The National Institute of Aerospace The National Institute of Aerospace is a nonprofit institute focused on aerospace and atmospheric research. Its programs involve more than 200 people on projects sponsored

by NASA, the Federal Aviation Administration, the Department of Defense, the National Science Foundation and the commercial aerospace industry. The institute was formed by a consortium of research universities. Members in Virginia include Hampton University, the University of Virginia,

Photo courtesy Hampton University

Virginia Tech, Old Dominion University, the College of William & Mary and the American Institute of Aeronautics and Astronautics Foundation.

Hampton University Proton Therapy Institute

Thomas Jefferson National Accelerator Facility (Jefferson Lab)

Photo courtesy Jeffeson Lab

Scientists from around the world use the lab’s particle accelerator, known as the Continuous Electron Beam Accelerator Facility (CEBAF), to understand the most basic building blocks of matter. The Newport News-based lab is a U.S. Department of Energy Office of Science national laboratory.

The lab, founded in 1984, also teams up with industry and university partners on research and works to teach the younger generations about science and technology. The campus, located in Newport News, spans 169 acres and has almost 70 buildings.

Thomas Jefferson National Accelerator Facility (Jefferson Lab)

The Suffolk facility conducts modeling and simulations to support training, decision-making and problem solving.

The center was established in 1997 to help the Department of Defense with military training. Today projects have expanded to digital shipbuilding, medical simulation, cybersecurity and human behavior modeling. "We know in the past 20 years, VMASC has been responsible for $100 million in research,” U.S. Sen. Mark Warner said in a statement earlier this year celebrating the organization's 20th-year-anniversary. Earlier this year, VMASC served as the site for summer camps aimed at stimulating kids’ interest in Science, Technology, Engineering and Math (STEM). Topics range from robotics to game development and 3D Modeling.

Photo courtesy ODU Virginia Modeling, Analysis & Simulation Center/Facebook

Virginia Modeling, Analysis and Simulation Center (VMASC)

ODU Virginia Modeling Analysis & Simulation Center

HAMPTON ROADS BUSINESS - 2018

37

Monthly

Regional Views Central Virginia Eastern Virginia Northern Virginia Roanoke/New River Valley Shenandoah Valley Southern Virginia Southwest Virginia

Target your advertising message in any one of our seven Regional Views published each month in Virginia Business.

Place your ad in or adjacent to the editorial report of your desired region.

REGIONAL VIEW

REGIONAL VIEW

eastern virginia Cavalier Hotel reopens after $81 million renovation

by Paula C. Squires

H

ospitality executive Bruce L. Thompson once told the Virginia Beach City Council that he didn’t want to be “the guy who tore the hotel down.”

These days, Thompson and his business partners are being praised as the group that saved the iconic Cavalier Hotel. After nearly five years and $81 million in renovaThe Raleigh Room, tions, the historic Virginia a space for cocktails Beach hotel officially and tea, is off the main reopened March 7. lobby of the hotel.

“It could have had 3,200 units on it,” Thompson, CEO of Gold Key| aimed at resolving a lawsuit PHR, a Virginia Beach-based over minority shareholder hospitality company, told a rights that had been filed large gathering that attended by warring factions of the the property’s ribbon-cutting Disthene Group, the hotel’s celebration. owner at the time.

Thompson was referThompson’s group, Cavaring to other developers who lier Associates LLC, which wanted to demolish the hotel includes Frank Reidy, George and put up high-density resiMetzger, Bart Frye, Ed Ruffin dential projects after a judge and John Lawson, wanted ordered that the property be to renovate the seven-story sold in 2012. The order was hotel at 4200 Atlantic Ave. FOR THE RECORD Chesapeake Square Mall has a new lease on life.

Virginia Beach-based Kotarides Holdings purchased the 29-year-old mall for $12.9 million and wants to revive its reputation as a destination regional mall.

The 613,809-square-foot enclosed mall is anchored by J.C. Penney, Burlington Coat Factory and Target stores and Cinemark Chesapeake Square cinemas. Target and Cinemark own their spaces.

With a current occupancy rate of 58 percent, the mall has about 100 stores and kiosks.

(VirginiaBusiness.com) CBRE|Charlottesville said the Crossways Shopping

12

Center at 1589-1593 Crossways Boulevard in Chesapeake was bought

by Ultimate Retail Realty LLC. An affiliate of Harbor Group International LLC was the seller. Financial details of the deal were not released. Crossways is a 152,564-square-foot regional shopping center anchored by a 45,000-square-foot Grand Furniture store and a 45,000-square-foot Ashley HomeStore. Other tenants include a 42,697-square-foot U.S. Coast Guard Exchange and a 19,564-square-foot Jo-Ann Fabrics store.

(VirginiaBusiness.com) At Fort Monroe, all roads lead to 2019. To that end, the Fort Monroe Authority unveiled

APRIL 2018

because it had been a beloved landmark for weddings and meetings since its opening in 1927.

With the property in a state of deterioration, the renovation took much longer than expected. Along the way, an entire village got on board.

The Virginia Beach City Council designated nearly $25 million in money and incentives to help finance the reno-

in February the preliminary details of a proposed nearly $8 million project, which the authority hopes will culminate with a new Visitor and Education Center by August 2019.

The goal is to have the new center launch coincide with the 400th anniversary and commemoration of the arrival of the first Africans in 1619 to English North America at Old Point Comfort. The plan is vital to the mission and future identity of Fort Monroe, says Executive Director Glenn Oder. (Daily Press) If you’re interested in installing a few solar panels on your roof, Hampton Roads Solar Co-op is ready to provide a helping hand.

The regional co-op, which

vation, which also qualified for state historic tax credits.

Julie Langan, director of the Virginia Department of Historic Resources, calls the renovation “a gift to the commonwealth,” because it showcases the importance historic tax credits have in saving old structures.

Virginia Beach Mayor Will Sessoms also praised the renovated 85-room Cavalier.

The hotel’s reopening created more than 200 year-round jobs and is expected to generate $41 million to $52 million in new tax revenue in the first 20 years.

Thompson, who got his start in timeshare properties, is happy with the outcome, too. “I’d like to be known, with respect to this property, as someone who deeply cared about not only restoring the hotel but bringing it back to grace and grandeur — doing it in a way that the entire community could be proud,” he says.

stretches from Virginia Beach to Williamsburg, is part of Solar United Neighbors, a nonprofit dedicated to helping individuals and small businesses harness solar energy. Founded in 2007, the nonprofit operates in 10 states and the District of Columbia. “Our job is to help communities address some of the barriers to go solar,” said Aaron Sutch, program director for Solar United Neighbors of Virginia.

The nonprofit has done 650 installations in Virginia. (The Virginia Gazette)

Oakland Industrial Park in Newport News. The space adds a showroom for product demonstrations and training, as well as additional assembly capacity. Before the expansion, the German company was operating out of 33,100 square feet of office and assembly space.

It produces personalized ID cards and other cardrelated security documents, as well as smart labels for access control, supply chain management and tracking of textiles, and applications for retail. (Inside Business)

Muhlbauer International has opened its Smart Factory Competence Center that added 51,200 square feet to its U.S. headquarters in

The first building in the Newport News Tech Center Research Park near Jefferson Lab is on track to complete construction this

Photo by Mark Rhodes

fall, and its committed anchor tenant expects to employ about 200 workers there, leaders confirmed.

Medical device firm ivWatch signed a letter of intent for more than 25,000 square feet of space and plans to consolidate and relocate its Hampton and James City County offices in the building, where the company would have more room to grow, said ivWatch President and CEO Gary Warren. (Daily Press) The Port of Virginia in early March launched the initial phase of a trucker reservation system (TRS) at its largest terminal. TRS is an effort to manage truck flow volume at Norfolk International Terminals, the port’s largest marine terminal. In the first phase, motor carriers calling between 5 and 7 a.m. Monday through Friday at the terminal will be required to have a reservation.

Reservations also will be required for truckers visiting NIT between 7 and 9 a.m. on Saturday. TRS will be added to the port’s Virginia International Gateway terminal in Portsmouth this summer. (VirginiaBusiness.com) Norfolk-based S.L. Nusbaum Realty Co. has joined forces with another local company, Atlantic Dominion Distributors, on a $35 million apartment community in Virginia Beach. Work began in December on the 282-unit Mezzo Apartment Homes, a gated community on

Virginia Beach Boulevard that will offer multiple floor plans and upscale amenities. One-, two- and threebedroom units are planned with lake views, along with studio apartments.

According to Nusbaum, rents will range from $1,075 to $1,750.

(VirginiaBusiness.com) Summit Pointe Realty LLC has unveiled plans for continued development of Summit Pointe in Chesapeake. Summit Pointe is presently zoned to develop 1 million square feet of office space, more than 1,400 residences, up to 500,000 square feet of retail space and 250,000 square feet of hospitality and conference space. The project, which represents an investment of more than $300 million, will be developed in a number of phases. (VirginiaBusiness.com) A proposed unmanned-systems facility for testing drones in York County is getting some money to get off the ground. The idea is to turn a 192-acre former state fuel farm off Penniman Road into a place for businesses to test drones, possibly leading to an industrial park for those businesses and a park for drone hobbyists. The land is now unused and is an approved Federal Aviation Administration fly zone. GO Virginia awarded $150,000 to the project, which is sponsored by all localities on the Peninsula. The localities will

also put up $150,000 to match the award. That pool of money will go to preliminary work for the project, like forming a regional industrial facilities authority and consulting with an engineering firm to determine the project’s feasibility, according to Jim Noel, York County’s economic development director. (Daily Press)

PEOPLE CBRE|Hampton Roads has promoted Perry Frazer to executive vice president. He also will continue as the managing director of CBRE’s regional office. (VirginiaBusiness. com) Vandeventer Black LLP partner Arlene F. Klinedinst has been elected chair of the Virginia Bar Association Labor Relations & Employment Law Section. Klinedinst also served as chair of Vandeventer Black’s Labor and Employment Department. (News release) Portsmouth-based TowneBank has promoted William B. Littreal to senior vice president and chief financial officer. Littreal, a certified public accountant, succeeded Clyde E. McFarland Jr., the bank’s founding CFO. (VirginiaBusiness.com)

Robert S. McKenna is the new president and CEO of the Virginia Peninsula Chamber of Commerce.

Selected from more than 185 applicants, McKenna is a retired U.S. Navy captain. (News release)

MOVA plans to recycle components from exhaust

by Tim Thornton

The College of William & Mary has named its first woman president.

Katherine A. Rowe will succeed retiring president W. Taylor Reveley III on July 1. Rowe is provost and dean of the faculty at Smith College in Massachusetts. At Smith, Rowe leads a nine-person senior team managing more than 600 employees. She has also served as Smith’s interim vice president for inclusion, diversity and equity. (VirginiaBusiness.com)

S

teve Critchfield didn’t expect to be the Roanoke-Blacksburg Technology Council Entrepreneur of the Year.

“I was surprised,” he says.

“I really was. I’m not saying that because that’s what you’re supposed to say in Hollywood.

“I really did not think much about it because I’ve been doing this since ’86 and probably before that. I didn’t know what the word ‘entrepreneur’ meant until recently, but I enjoy doing this stuff.”

What Critchfield has been doing is creating companies and solving problems. In 1986, he founded Tele-Works, a company that enabled electronic payments to local governments across the United States and beyond. Since selling the company in 2014, he has helped other startups get organized and succeed, helped start a Virginia Tech program offering graduate-level training for aspiring local govern-

Virginia Beach-based Armada Hoffler has promoted Eric Smith from chief investment officer to chief operating officer. Since joining Armada Hoffler in 2005, Smith’s roles have spanned finance, investments, development, operations and asset management. (News release) Edward D. Whitmore has been named chairman of the board of the Mariners’ Museum and Park. Whitmore owns many marine-related companies, including US Waterways Transportation LLC, Norfolk Tug Co. and Buchanan Marine LP. (News release)

FOR THE RECORD Appalachian Power Co. plans to build a 138-kilovolt substation and three miles of distribution line at the Greenfield Industrial Park in Botetourt County. The substation is expected to improve power reliability in the county and decrease the time needed for restorations during power outages, the company says. If the plans are approved by the county’s Planning Commission and Board of Supervisors, construction would start in summer 2019. (The Roanoke Times) GE Power announced in early June a tentative plan to end more than 60 years of manufacturing at its Salem plant next year, a union official said. A local mainstay of high-tech manufacturing would

www.VirginiaBusiness.com

VIRGINIA BUSINESS

13

Photo by Don Petersen

Steve Critchfield was surprised at being named Entrepreneur of the Year by the RoanokeBlacksburg Technology Council.

ment officials and assisted in establishing scholarships and awards at Tech.

Critchfield’s initial vision and motivation of Tele-Works was not so grand. “I didn’t start the company to be an entrepreneur or even sell it,” he says. “I started the company because I needed a job.”

Critchfield’s current company, MOVA Technologies, aims a little higher. The goal of the Pulaski-based business is to turn toxic and climatechanging air pollution into commodities with a market of $500 billion or more.

be reduced to an engineering center and more than 250 people would lose their jobs, if sluggish business conditions in the power sector cause the company to mothball the plant’s manufacturing equipment. GE would continue to employ more than 200 professionals in its Power, Renewable Energy and Baker Hughes businesses based at the plant, which opened in 1955.

(The Roanoke Times) The Virginia Tech Carilion health sciences campus in Roanoke is expected to have a substantial economic impact on the state’s economy within eight years.

According to an economist from the University of Virginia’s Weldon Cooper Center for Public Service, the impact will grow from $214 million today to $465.2

MOVA uses technology developed by the late Arthur Squires, a Virginia Tech professor who began his career working on the Manhattan Project that developed the first nuclear bomb. MOVA intends to capture the components of the exhaust from burning fossil fuels. Those components — including mercury, lead, arsenic and carbon — then would be recycled.

Many organizations have attempted to capture and store carbon, including American Electric Power’s Mountaineer Plant project that closed in

million annually by 2026. The addition of a second building for the research institute will create 828 jobs and generate $150 million in additional spending.

The economist described the study as “conservative,” since it did not consider the impact that additional undergraduate spending might have on Roanoke. (The Roanoke Times) The Roanoke-Blacksburg Regional Airport continues to see traffic increase this year.

April traffic was up 10.6 percent on a year-over-year basis, with 52,957 passengers compared with 47,860 in April 2017. Yearto-date 2018 traffic is up 5.5 percent. At this pace, the airport says it is on track to have its busiest year since 2011. (News release)

www.VirginiaBusiness.com

2012, the same year Squires died. None of those attempts have managed to accomplish the task in a way that is economically feasible, Critchfield says.

“Everybody can capture carbon, or at least they think they can,” he says. “But what they’ve been trying to do is sequester it.”

MOVA means to market it. The next step toward that end is building and testing a prototype of the pollutant-capturing apparatus. Once that’s done, Critchfield plans to market the technology to chemical companies that can manufacture the sorbents used to capture the components.

Four-year-old MOVA is “probably two years away from that point,” he says.

The patents for the process are owned by a trust, Critchfield says, and 25 percent of any profits will support Virginia Tech engineering and agriculture programs and art programs across Southwest Virginia.

AAA recently awarded The Hotel Roanoke & Conference Center and its restaurant, The Regency Room - a Four Diamond rating.

The renovated historic property is part of the Curio Collection

by Hilton, a global portfolio of upscale hotels and resorts known for their individuality.

According to Michael Quonce, the hotel’s public relations and advertising manager, this is the first time the property has received the four-diamond designation in 20 years, since requirements from AAA to gain the ranking changed in the 1990s. (VirginiaBusiness.com)

PEOPLE Dwayne Pinkney starts work as the new senior vice president for operations and administration at Virginia

Tech on Aug. 1. Pinkney will oversee the university’s financial and operational enterprises.

He comes to Tech from the University of North Carolina at Chapel Hill where he was senior associate vice chancellor for finance and administration.

(News release) Lynne Doughtie, chairman and CEO of KPMG LLP, is this year’s recipient of Virginia Tech’s University Distinguished Achievement Award. In 2015 Doughtie became the first female top executive at KPMG, one of the world’s leading professional service firms. She began working at KPMG soon after graduating from Virginia Tech in 1985 with a bachelor’s degree in accounting. (News release)

VIRGINIA BUSINESS

OUR READERSHIP SURVEY SHOWS THAT: 42 PERCENT of our readers occupy C-suite or higher positions in their companies.

64 PERCENT have an annual household income of more than $100,000.

35 PERCENT have a net worth in excess of $1 million.

Take advantage of this opportunity to have an ad presence for a statewide audience!

Please contact: Sara Gray - 757.625.4233 sgray@va-business.com

www.virginiabusiness.com

21

RESIDENTIAL REAL ESTATE Real estate taxes Locality

Chesapeake 2

Assessment ratio1

Nominal tax rate1

Effective tax rate1

95.2%

$1.04

$0.99

2

100.0

0.99

0.99

Gloucester 2

97.5

0.70

0.68

Hampton 2

99.7

1.24

1.24

Isle of Wight County

100.0

0.85

0.85

James City County

94.9

0.84

0.80

Mathews

100.0

0.58

0.58

Newport News

97.8

1.22

1.19

2

97.4

1.15

1.12

Franklin

Norfolk

Poquoson

99.4

1.07

1.06

Portsmouth

100.0

1.30

1.30

Southampton County

92.1

0.85

0.78

2

98.3

1.03

1.01

Surry

100.0

0.71

0.71

2

90.1

1.00

0.90

Williamsburg

96.9

0.57

0.55

York

98.1

0.80

0.78

Suffolk

Virginia Beach

1 For fiscal year 2017-2018

2 District levies are imposed in addition to the basic county or city levy.

Source: Virginia Economic Development Partnership Notes: • Assessment ratio: percentage of fair market value • Nominal tax rate: rate per $100 of assessed value • Effective tax rate: assessment ratio X nominal tax rate

Median sales prices of residential properties Locality

2016

2017

Percent change

Hampton Roads

$225,000

$230,000

2.22%

Chesapeake

260,000

266,055

2.33

Suffolk

241,750

253,085

4.69

Virginia Beach

249,900

253,000

1.24

Norfolk

185,000

195,500

5.68

Newport News

173,000

174,000

0.58

Hampton

155,000

161,500

4.19

Portsmouth

140,000

149,999

7.14

Source: Real Estate Information Network Inc., the Multiple Listing Service (MLS) for the Hampton Roads region.

Note: Includes resale and new construction sales. New construction sales are based on REIN member listings and may not represent total number of sales.

Behind the numbers Residential sales prices continue to rise

Photo by Mark Rhodes

H

ome values are rising in Hampton Roads. According to the latest available data from the Real Estate Information Network Inc., the Multiple Listing Service for the region, the median price of buying a house in Hampton Roads was $230,000 last year. That’s 2.2 percent higher than the year before.

When examining the region’s seven major cities — Chesapeake, Hampton, Newport News, Norfolk, Portsmouth, Suffolk and Virginia Beach — the median sales price of homes in Portsmouth increased by the highest percentage from 2016 to 2017. The cost of residential property in the city increased 7.1 percent from $140,000 to just under $150,000.

On the flip side, sales values increased only slightly in Newport News over that time period. The median sales price rose from $173,000 to $174,000, an increase of roughly six-tenths of a percentage point.

Properties in Chesapeake had the highest sales price. Transactions in the city amounted to a median sales price of $266,055 last year and $260,000 the year before. Although the median sales price increased the most in Portsmouth between 2016 and 2017, the locality still had the lowest median sales price in the area.

HAMPTON ROADS BUSINESS - 2018

39

Reesidentt ial Real Esstat e

40

HAMPTON ROADS BUSINESS - 2018

Photo by Mark Rhodes

Residential Real Estate Review with

Katie Zarpas Realtor, Long & Foster Real Estate and Christie’s Luxury Property Specialist

K

atie Zarpas left the glow of Hollywood for Hampton Roads nearly two decades ago after a career in the film industry working with directors like Woody Allen and Irwin Winkler. She found a second calling as a Realtor in 2005, selling $4.9 million in real estate during her first year in business. Last year, she logged more than $20 million in sales, earning Long & Foster Master’s Club designation and the Hampton Roads Realtor Association’s Diamond Circle of Excellence Award. Hampton Roads Business asked Zarpas about the perks and challenges of living in the region, as well as industry trends.

Cities and counties served: Southside Hampton Roads, including Virginia Beach, Norfolk, Chesapeake, Suffolk and Portsmouth Family: Two sons and an extended family that stretches from here to Northern Virginia and beyond.

Hobbies: The water! I love the beach, going out on the boat, and now I’m learning to paddle board.

What part of Hampton Roads do you live in?

What’s your favorite part about living there? I live in Birdneck Point in Virginia Beach. I love it because many of the homes are on the water, I’m close to the beach and the interstate, and my office is only a half-mile away.

What types of customers do you work with?

Do you specialize in a specific area of real estate? I sell a lot of beach homes and waterfront homes in Virginia Beach. About half of my business is families that want to downsize; the other half is helping people find the home of their dreams.

What top local trend have you noticed in residential real estate this year? We are definitely in a seller’s market. Low inventory means sellers can set a price and expect a full price offer. Buyers are not able to get the same kinds of concessions they could get two years ago: items like closing costs

assistance, aggressive lower offers, extended home warranties, etc.

What region or neighborhood in Hampton Roads is the next hot spot for residential real estate development? Why? We’re still seeing a lot of new construction in the Kellam High School district and in the corridor along Princess Anne Road near the Courthouse [in Virginia Beach.] The Kellam area is attractive because people like the highquality schools paired with new construction. The area by the Courthouse is appealing because it’s convenient to [Naval Air Station Oceana], shopping, and interstates, and it’s usually very affordable.

What’s the biggest hurdle to buying a house in Hampton Roads? How about the biggest benefit? Right now, there are two hurdles: shrinking inventory and rising interest rates. The smaller number of available homes has driven median prices up 10 percent over last year. Pair that with higher mortgage rates, and a person’s buying power can really diminish. The biggest benefit of home ownership is locking down your house payment. Rent can go up with no warning. Your mortgage will be the same over the long term, so you can plan for the future.

What’s your take on millennials and homeownership? Are most of them buying homes or opting out because they can’t afford it or don’t want to? They can’t afford it, and even for those that can afford it, they are deeply suspicious of the process. Think about the environment millennials came of age in. They were graduating from college in the middle of a housing crisis. They may have seen their parents or families lose their homes — that alone means that millennials are going to be more worried about home ownership. Also, consider the pressures in our economy that squeeze them out of home ownership: they have huge student loans, companies are laying off workers all the time or paying them entry level salaries for skilled jobs; plus rent, health care, basic utilities are all more expensive than they were 20 or 30 years ago.

HAMPTON ROADS BUSINESS - 2018

41

TECHNOLOGY

TECHNOLOGY

Subsea cables open new sector for Virginia Beach City officials believe cables could attract new industries

Graphic courtesy Virginia Beach Economic Development

by Jessica Sabbath ata from around the world are coming ashore in Virginia Beach.

By 2020 at least four subsea cables carrying thin, hair-like fibers that can transfer data millions of times faster than an average home internet speed will reach the city.

The investments already are having a major effect on the city’s economy, transforming Virginia Beach into a digital port.

“These subsea cables certainly have given Virginia Beach the opportunity to pursue another targeted industry sector to help diversify our economy and certainly to look for other forms of capital investment and job creation,” says Warren Harris, economic development director of Virginia Beach.

Additional cables are in the pipeline.

“We have another four to six that are currently in the development stages that could land in Virginia Beach,” says Rob Hudome, senior project development manager for Virginia Beach Economic Development.

City officials believe these cables could attract a host of new industries needing high-speed data, including data processing, international trade financing, architectural and engineering services and computer systems design.

D

42

The city has seen a series of followup investments since it announced in spring 2016 that Microsoft, Facebook and internet infrastructure company Telxius would build a 4,000-mile long subsea cable from Bilbao, Spain to Virginia Beach.

Virginia Beach offered a number of advantages for cables. It diversified the location of these data-rich cables that previously mostly connected to New York or Miami.

The city also is about 200 miles from Loudoun County, home to the largest concentration of data centers in the world. More than 70 percent of the world’s interest traffic passes through Loudoun’s digital infrastructure.

The first cable, named Marea, Spanish for the word “tide,” was complete in late 2017. A second cable, called BRUSA, owned and operated by Telxius, will connect Virginia Beach with Puerto Rico and Brazil. That should be complete by the end of 2018.

Two additional cables are in the planning stages. Google announced this summer its plan to build a 4,000-mile long subsea cable connecting France and Virginia Beach.

Just a few months earlier, ACA International LLC announced a partnership

HAMPTON ROADS BUSINESS - 2018

with South Atlantic Express International Ltd. to a build a subsea cable connecting South Africa and Virginia Beach.

ACA International is building a landing station for its cable and a 130,000-square-foot data center that will house its new corporate headquarters in Corporate Landing Business Park. The company is moving its headquarters from Northern Virginia.

The subsea cable connectivity has breathed new life into the 325-acre Corporate Landing Business Park, which is located on the southwest side of Naval Air Station Oceana. The park, which is the only Dominion Energy-certified data center site in Southeastern Virginia, also is home to the 24,000-square-foot cable landing station for the BRUSA and Marea cables.

Virginia Beach-based Globalinx Data Centers is building a 150,000-square-foot data center campus in the business park as well. The data center will be the first in the city to offer networks and other businesses direct access to the subsea cables through what is called a carrier hotel.

But it’s not just the futuristic cables that are making an impact. Virginia Beach has been capitalizing on its newfound status as a digital port and providing incentives to encourage data center investment. The city lowered its tax rate on data center equipment from $4 per $100 of investment to 40 cents per $100 and is offering rebates on business taxes and reimbursements for water and sewer fees.

The city also is in the planning stages of building a conduit duct system at the corporate park, allowing tenants to tie directly into the fiber and the power of the subsea cables.

Data centers likely will expand beyond Corporate Landing’s borders. NxtVn has proposed spending $1.5 billion to $2 billion to build a new data center near Corporate Landing for companies needing high-speed connectivity. That could include as much as 1.4 million square feet of buildings.

TRANSPORTATION

TRANSPORTATION

From dream to reality Regional funds make big highway projects possible

by Jessica Sabbath decade ago, highway projects like a new High Rise Bridge or the expansion of the Hampton Roads Bridge-Tunnel were merely a dream.

Now, both are a reality — along with a host of other major projects — thanks to dedicated regional transportation money. (For information on these projects, see the following page.)

Legislation from 2013 allowed the Hampton Roads Transportation Accountability Commission (HRTAC) to collect revenue from regional sales and gas taxes to be used for highway projects. In fiscal year 2017, those taxes brought in $156 million.

A new law passed in 2018 should provide an additional boost in revenue. SB 896 adds a floor to the 2.1 percent motor fuels tax so collections won’t be harmed by low gas prices. The change could mean an additional $20 million annually for the region.

Hampton Roads projects also have received funds from the Virginia Department of Transportation’s Smart Scale program, which dedicates money to regional projects based on a funding formula.

In August, HRTAC submitted a $200 million request for Smart Scale funding for the expansion of the Hampton Roads Bridge-Tunnel.

Roads certainly aren’t the only way to get around the Hampton Roads region.

Since 2017, Norfolk International Airport has welcomed two discount airlines: Allegiant and Frontier airlines. Both are offering new destinations from the airport.

Frontier Airlines will begin offering nonstop air service from Norfolk to Phoenix and Tampa., Fla., beginning in November. The seasonal service will be offered to these loca-

A

Photo courtesy Virginia Department of Transportation

tions twice a week. This summer, the airline began offering service to Denver and Orlando, Fla., twice a week.

Frontier also provides the only direct flight from the airport to Las Vegas.

In October 2017, Allegiant Air began nonstop service to several Florida airports, including the only direct connection from Norfolk to Tampa and Fort Lauderdale, Fla., which fly twice weekly.

In addition to flight options, peo-

ple traveling to and from Hampton Roads also can opt for passenger rail. The regional Amtrak service to Norfolk celebrated its fifth anniversary in December 2017 with record ridership for the Washington, D.C.Norfolk service.

Hampton Roads Transit also celebrated a host of new buses in its fleet. The public transit agency purchased 28 new buses for a total of $13.6 million.

Year-to-date passenger share at Norfolk International Airport Airline

Total Passengers1

Market Share

Allegiant Air2

14,343

0.4%

American Airlines

1,143,322

33.8%

Delta Air Lines

1,010,396

29.9%

Southwest Airlines

663,014

19.6%

United Airlines

549,827

16.3%

Total

3,380,902

1 Total passengers is enplaned and deplaned passengers.

Source: Norfolk International Airport 2 Allegiant Air began service in October 2017. Frontier Airlines had not begun service yet.

HAMPTON ROADS BUSINESS - 2018

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Transportation

Major road projects There are several projects underway aimed at alleviating congestion in Hampton Roads and repairing roads and bridges. Below are major initiatives.

Interstate 64 is being widened on the Peninsula in three phases.

Photo by Trevor Wrayton/Virginia Department of Transportation

Chesapeake Bay Bridge-Tunnel The Chesapeake Bay Bridge-Tunnel (CBBT) provides a 23-mile link from Virginia Beach to the Eastern Shore.

The CCBT commission is currently building a $756 million parallel tunnel under the Thimble Shoal Channel in the Chesapeake Bay. The new tunnel eventually will carry two lanes of southbound traffic. The existing lanes will carry two lanes of traffic northbound. Construction should be complete in October 2022.The CBBT currently carries more than 4 million vehicles each year.

Interstate 64 Widening The widening of Interstate 64 on the Peninsula has been considered one of the most vital projects in Hampton Roads. The project includes widening the highway from four to six lanes on a 21-mile stretch through Newport News and York and James City counties. The project is being built in three phases.

The first segment, which runs 5.6 miles in Newport News, already is complete. The Virginia Department of Transportation is using environmentally friendly processes and 44

recycled materials on segments two and three. The recycling project is expected to save $15 million and is one of the largest pavement recycling projects in the U.S. Construction is ongoing on the second phase, and construction began on the third phase of the project in August 2018. The final phase is expected to be complete in fall 2021.

Interstate 64 Southside – High Rise Bridge VDOT awarded its largest designbuild contract — $410 million — for the project. It includes the expansion of Interstate 64 for eight miles in Chesapeake and the building of an additional two-lane bridge to the south of the existing High Rise Bridge. I-64 will be widened from four to six lanes. Construction began this summer and is expected to be complete by summer 2021. After the new bridge is complete, the existing bridge will convert to eastbound traffic, while the new bridge will include westbound traffic. The widening will add one High Occupancy Toll (HOT) lane in each direction. The project is expected to improve safety along the corridor, increase capacity and enhance an evacuation route for the region. It will tie into a second phase

HAMPTON ROADS BUSINESS - 2018

of the project, which will expand the corridor to eight lanes and replace the existing High Rise Bridge.

Hampton Roads Bridge-Tunnel Expansion More than 100,000 cars travel the Hampton Roads Bridge-Tunnel each day during the summer tourist season, and that has created congestion at the water crossing that can stretch for miles in both directions. Now the state is moving forward with a project expected to add a parallel bridge-tunnel that is estimated to cost between $3.3 billion and $3.8 billion. Two contractors are bidding on the project, which is expected to be awarded in early 2019. The Virginia Department of Transportation chose to use the bored-tunnel construction method, which is the same technology being used to build the Thimble Shoal Tunnel on the Chesapeake Bay Bridge-Tunnel. The technology uses a massive tunnel-boring machine to excavate the soil. The method will include significantly less impact to marine life and will reduce disruption to commercial and Navy vessel traffic. Construction is expected to begin in 2019 with an estimated completion in 2024.

Transportation Nonstop destinations and daily departures from local airports Destination

NIA

NNW

Atlanta

8

4

Baltimore

5

N/A

Boston

1

N/A

Charlotte, N.C.

8

6

Chicago (MDW)

2

N/A

Chicago (ORD)

7

N/A

Dallas

2

N/A

1.7

N/A

4

N/A

0.3

N/A

2

N/A

0.4

N/A

Denver

1

Detroit Ft. Lauderdale, Fla.

2

Houston (IAH) Las Vegas

3

Miami

3

N/A

Minneapolis

1

N/A

New York (JFK)

5

N/A

New York (LGA)

9

N/A

Newark, N.J.

5

N/A

1.7

N/A

6

3

0.3

N/A

Washington (IAD)

4

N/A

Washington (DCA)

3

N/A

Orlando, Fla.

4

Philadelphia Tampa

5

NIA: Norfolk International Airport Source: Airports NNW: Newport News/Williamsburg International Airport

Passengers at Hampton Roads airports Year

NIA

NNW

2017

3,380,902

410,058

2016

3,209,185

411,641

2015

3,034,407

418,889

2014

2,965,306

532,655

2013

3,112,355

544,031

NIA: Norfolk International Airport NNW: Newport News/Williamsburg International Airport Source: Individual airports

N/A: Not available

Photo courtesy Amtrak

Amtrak fiscal year 2017 ridership

1 United Airlines offers a daily flight to Denver from NIA, while Southwest Airlines offers direct flights twice a week and Frontier Airlines offers departures three times per week.

RIDERSHIP FY17

FY16

% change

Newport News

106,692

107,894

-1.1

Norfolk

47,493

44,316

7.2

2 Allegiant Air offers flights twice a week to Ft. Lauderdale from NIA. 3 Frontier Airlines offers departures to Las Vegas from NIA three times a week.

4 Southwest Airlines offers daily departures to Orlando from NIA, while Allegiant Air offers two departures a week and Frontier Airlines offers departures three times a week.

5 Allegiant Air offers departures from NIA to Tampa twice a week.

Source: Amtrak

Note: Boardings and debarcations for fiscal years 2016 and 2017.

Note: Includes departures offered as of the week of Aug.19.

Local transportation

RIDERSHIP1 FY 2015

FY 2016

FY 2017

FY 2018

Bus transit

14,217,879

13,241,512

12,586,719

11,644,377

The Tide (light rail)

1,403,976

1,330,375

1,342,330

1,429,978

Ferry

283,211

246,943

295,983

327,661

Paratransit

324,510

351,654

365,610

372,286

System total

16,229,576

15,170,484

14,590,642

13,774,302

1 Ridership is the number of times a passenger boards a Hampton Roads Transit vehicle, including transfers from one bus to another.

Source: Hampton Roads Transit

FY: Fiscal year

HAMPTON ROADS BUSINESS - 2018

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